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What the Queen's Speech Means for Small Business

Wednesday May 27, 2015

The UK government is calling small business the "engine room" of the economy. Let's look at where it thinks that engine's taking us.

Once you look past the pageantry and fanfare of the Queen's Speech, what we're really seeing is a roadmap of the journey the country will be taking for the next five years. As adventurers and explorers, we understand the value of a well drawn map, but we also know how easy it is to be dragged off its edge into unknown territory. Sometimes that's an opportunity, sometimes a calamity - and knowing the difference is the key to survival. With a new government setting out its vision of the future, it's time to study the map they've drawn up and mark a few of its traps and treasures for ourselves.

Full Employment

The first landmark to note is the goal of full employment. David Cameron is looking to plant his flag on the highest employment peak in the G7. That's a grand ambition, if he can make the climb - and the three million new apprenticeships he's determined to create show he's got a plan for the ascent. From a small business perspective, helping young people to enter the workforce with the right skills could be a major boost - but full employment doesn't necessarily mean more efficiency or productivity. Apprenticeships don't suit every employer, and a stronger focus on getting the right technology and research tools into small business hands might have been preferable. Standing at the peak of the employment mountain might offer an amazing view, but not if all we're looking down on are small businesses struggling to keep their footing on the rock face.

Regional Empowerment

Another striking feature of Cameron's roadmap is the way it depicts the UK's terrain itself. Regional empowerment and the creation of "metro mayors" combine with support for high-speed rail links to draw a very different picture of how the country is structured. Investment in the north is a definite plus for businesses based there, and a more balanced business landscape could be helpful in general - but small businesses are already leading the way in using technology to blast through geographical barriers and any uncertainty about these newly devolved powers could lead to investors getting a little gun-shy. These ideas could lead to long-term benefits, but they need to be carefully thought through. You can't smooth over difficult terrain just by drawing a prettier map of it.

The Red Tape Challenge

It's not just the major geographical features that are getting an overhaul in this session of parliament, of course. The whole way we navigate them is changing, too. The Enterprise Bill being put forward is aiming to cut red tape and save business £10 billion. They're also planning to simplify the way we handle disputes, with a Small Business Conciliation Service. Deregulation is generally a good thing for the smaller end of business, so easier, cheaper ways of negotiating late payments or other roadblocks will be very welcome. Then again, it may not be as simple in practice as it is on paper, and cutting red tape by setting up new bureaucratic bodies might just be replacing one problem with another.

VAT and National Insurance Lock

With any new map, you have to look as closely at the things that aren't changing as the ones that are. Top of that list right now is the five-year "lock" the government is putting on taxes and National Insurance. That's a bold move right there, and it's going to be a strong landmark to navigate by when you're charting your own course through this new terrain. If everything goes to plan, we'll have a stable, easily forecast financial climate that will simplify journey planning for everyone. That said, setting those rates in stone now might limit the ability of the government to raise funds or react to a shifting economic environment. Things change quickly in the small business world, and public bodies can move like glaciers in comparison.

All in all, the Queen's Speech went a respectable way toward confirming the government's talk of taking small business seriously. With an EU membership referendum on the horizon and some friction with the Scottish parliament, explorers and adventurers across the UK will be watching Anna Soubry, the new Minister for Small Business, closely. As for RIFT, we'll be working hard with our clients and partners to help small businesses thrive and grow. So grab your maps, check your compasses and let's Forge the Future together!